Tronox Holdings PLC (TROX, Financial), the world's leading integrated manufacturer of titanium dioxide pigment, released its financial results for the quarter ending September 30, 2023, on October 26, 2023. Despite softer market conditions, the company managed to deliver adjusted EBITDA within the guided range and took proactive steps to strengthen its balance sheet.
Financial Highlights
Tronox reported a revenue of $662 million in Q3 2023, marking a 26% decrease from $895 million in Q3 2022. The decline was primarily driven by lower sales volumes and lower selling prices of TiO2, zircon, and pig iron. The company's net loss attributable to Tronox in the quarter was $14 million, compared to net income attributable to Tronox of $121 million in the year-ago period.
Adjusted EBITDA for the quarter stood at $116 million, representing a 53% decrease compared to the third quarter of 2022. The decrease was driven by lower sales volumes, lower product pricing, and unfavorable fixed cost absorption. Despite these challenges, the company managed to deliver adjusted EBITDA within the previously guided range.
Co-CEOs' Remarks and Outlook
Co-CEO John Romano commented on the company's performance,
We delivered third quarter performance within the previously guided range despite softer market conditions by maintaining an unrelenting focus on managing what is within our control."He also highlighted that the company achieved an Adjusted EBITDA of $116 million and an Adjusted EBITDA margin of 17.5%.
Looking ahead to the fourth quarter, Romano expects pigment volumes to be relatively flat compared to the third quarter and anticipates Adjusted EBITDA for the fourth quarter 2023 to be $105-125 million.
Balance Sheet and Cash Flow
Tronox ended the quarter with $2.8 billion of total debt, $2.6 billion of net debt, and a net leverage ratio of 4.8x on a trailing twelve-month basis. The company raised a $350 million incremental term loan in August, which was used to repay outstanding borrowings under the Company’s revolving credit agreements and proactively enhance available liquidity for upcoming capital expenditures in 2024.
Sustainability
Tronox is also making strides in sustainability. The company's renewable solar project in South Africa is on track for completion in December 2023. Once completed and running at full capacity, the project will provide 200MW of solar power to Tronox’s mines and smelters and is expected to reduce Tronox’s global carbon emissions by 13% compared to the Company’s 2019 baseline.
Explore the complete 8-K earnings release (here) from Tronox Holdings PLC for further details.
